Hard Money Lenders in Sacramento: A Complete Guide

When you find a great flip opportunity, traditional bank financing is too slow. Hard money lenders can fund your deal in days, not months.

What is Hard Money?

Hard money is short-term financing secured by real estate. Unlike banks, hard money lenders focus on:

• The property's After Repair Value (ARV)
• Your exit strategy (flip or refinance)
• The equity cushion in the deal

They care less about:

• Your credit score
• Your W-2 income
• Your debt-to-income ratio

Typical Hard Money Terms in Sacramento

Term	Typical Range
Interest Rate	10% - 14%
Points (Origination Fee)	2 - 4 points
Loan-to-Value (LTV)	65% - 75% of ARV
Loan Term	6 - 12 months
Minimum Loan	$75,000 - $100,000
Funding Speed	5 - 14 days

When Does Hard Money Make Sense?

Good Use Cases:

• Fix and flip projects with clear exit
• Bridge loans while waiting for conventional financing
• Auction purchases requiring cash
• Properties that don't qualify for bank loans

Bad Use Cases:

• Long-term rentals (rates are too high)
• Deals with thin margins
• Your first flip with no experience

How to Get Approved

1. Solid Deal: Lenders want to see you're buying at 65-70% of ARV
2. Rehab Budget: Detailed scope of work and contractor bids
3. Exit Strategy: Clear plan to sell or refinance
4. Skin in the Game: Most lenders require 10-20% down
5. Experience: First-time flippers may need a partner or pay higher rates

Red Flags to Avoid

• Pre-payment penalties that eat your profit
• Hidden fees buried in documents
• No track record or references
• Pressure tactics to close quickly

Build Relationships Early

Don't wait until you have a deal to find a lender. Meet with 2-3 hard money lenders now. Understand their terms, get pre-approved, and have funding lined up so you can move fast.

Alternative: Private Money

Private money from individuals (friends, family, self-directed IRA investors) often has better terms than institutional hard money. Build your network.